2. Topics
• proposed Common European Sales Law
• Eurozone crisis – mitigating contract risks
• Groceries Code – Adjudicator Bill
• a year on from the Bribery Act
3. Proposed Common European Sales
Law – what is it?
• proposed optional sales law to facilitate EU cross border
transactions
• restricted to:
– sale of goods;
– sale of digital content; and
– services directly related to the goods / digital content
(eg repair and installation)
• applies to B2C and B2B contracts where at least one party
is an SME
• terms cover the life cycle of a contract
• mandatory provisions eg good faith and fair dealing
4. Proposed Common European Sales
Law – likely impact?
• 2 parallel systems in each Member State
• businesses may potentially need 3 sets of terms
to manage:
– domestic transaction terms
– EU cross-border transaction terms (CESL)
– worldwide transaction terms
• increase in cost and complexity?
• benefit?
5. Proposed Common European Sales
Law – next steps
• approval by European Parliament and the Council of
Ministers (by 1 January 2013).
• implementation 6 months following approval
6. Eurozone crisis – mitigating contract
risks – key considerations
• price:
– currency
– definition of “Euro”
– exchange rate provisions
• place of payment
• governing law and jurisdiction
7. Eurozone crisis – mitigating contract
risks – contract analysis
• interaction with other contract clauses
– force majeure
– change in law
– termination
• risk profile of the deal
– right to renegotiate price
– termination right
– material adverse change clause
8. Eurozone crisis – mitigating contract
risks - practical tips
• identify key / material contracts
• analysis of contracts for terms to identify
possible risks
• consider whether variations required to existing
contractual relationship
• draft future contracts to minimise risks
9. Groceries Code Adjudicator Bill
• Groceries Code Adjudicator Bill (May 2011) sets out:
– Statutory basis for Groceries Code Adjudicator (“GCA”)
– Functions and powers of the GCA
– Funding the GCA
• independent appointment
• initial term - up to 4 years
• mechanism for dealing with breaches of the GSCOP
by retailers
10. Groceries Code Adjudicator Bill -
functions and powers
• arbitration: referred by the supplier
• investigation: initiated by the GCA. Ability to consider
information from any source (subject to review)
• enforcement:
– publication of investigation
– fines (requires authorisation of Secretary of State)
• advice and guidance: through publications or directly to
either retailer or supplier
11. Groceries Code Adjudicator Bill –
potential impact?
• increase in referral of disputes?
• promote retailer compliance with GSCOP?
• redress “balance of power” between suppliers
and retailers?
12. Bribery Act – a year on
• no high profile corporate prosecution...yet
• so far only one minor prosecution under the Act
• Oxford Publications investigation – £1.9 million
voluntary settlement
13. Bribery Act – a year on
• international businesses placed emphasis on
Bribery Act compliance
• non UK entities using UK Ministry of Justice
guidance to ensure they have adequate defence
in place
• rising number of organisations and countries are
placing importance on anti-bribery / corruption
14. Bribery Act – a year on
• risk analysis on contract-by-contract basis
• due-diligence into anti-bribery procedures of contracting
parties
• regular statement of compliance with anti-bribery
provisions
• remedies for breach:
– termination
– liquidated damages
– forced removal of employees/directors
Investigation :The GCA can consider any information from any source e.g. information in the public domain, whistleblowers and trade associations, in compiling its investigation. However, where information could lead to identifying its source, this information cannot be used. The Government recognised that, in particular, where it is a supplier, this could lead to “retaliatory treatment by the retailer” and would also lead to suppliers being reluctant to raise concerns to GCA. Redresses the balance between suppliers and retailers.There will be a triennial review as to whether information from third party sources is either assisting or hindering the GCA – this in recognition that the GCA could be burdened by a higher volume of lesser quality complaints.At present, the GCA is not able to directly impose a fine on retailer unless it is authorised by the Secretary of State by way of an Order.
